QUESTION 4 Peter withdraws $5000 from his savings account. Then he deposits $4000 in his checking account and puts the remaining $1000 in a safe box in his house. What is the overall effect of these actions on M1 and M2? O A. M1 rises by $5000, M2 falls by $5000 O B. M1 is unchanged, M2 is unchanged O C. M1 rises by $5000, M2 is unchanged O D. M1 is unchanged, M2 falls by $5000

QUESTION 4 Peter withdraws $5000 from his savings account. Then he deposits $4000 in his checking account and puts the remaining $1000 in a safe box in his house. What is the overall effect of these actions on M1 and M2? O A. M1 rises by $5000, M2 falls by $5000 O B. M1 is unchanged, M2 is unchanged O C. M1 rises by $5000, M2 is unchanged O D. M1 is unchanged, M2 falls by $5000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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K nunn Suppose Shanna withdraws $7,500 from her money-market mutual fund and deposits this money into her son's chequing account at a chartered bank. Then OA both M2 and M2+ will decrease by $7,500. OB. the values of M2 and M2+ will remain unchanged. OC. both M2 and M2+ will increase by $7,500. OD. M2 will decrease by $7,500, but M2+ will increase by $7,500. OE M2 will increase by $7,500, and the value of M2+ will stay the same.
Suppose you read in the Wall Street Journal that the Fed was "increasing its target interest rate." It follows that the rate in question is the and one way in which Fed could achieve its new, higher target rate is by Select one: O a. Federal Funds Rate; conducting an open market sale O b. Federal Funds Rate; conducting an open market purchase O c. Prime Rate; conducting an open market sale d. Prime Rate; conducting an open market purchase
Sarafina withdraws $450 from her saving account and places the money in her wallet. This transaction will Select one: O a. not change M1 and decrease M2. Ob. increase M1 and not change M2. OC. increase both M1 and M2. O d. decrease both M1 and M2. Next
Pls help with below homework
Pls select the correct option and exlplain it.
Which of the following are tools the Federal Reserve uses to control the supply of mone Select one: O a. Open market operations O b. Term auction facility c. Interest of reserves d. Discount rate e. All of the above O O O
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Using the simply multiple deposit multiplier model, the Federal Reserve Bank desires to increase the size of checkable deposits by $50,500. If the required reserve ratio is 5%, then the Fed needs to purchase worth of securities in the open market. O $2,445 O $2,650 O $2,525 O $2,500
Suppose the required reserve ratio is 10% and a bank receives a $10 million deposit into a checking account. By how much will deposits change in the banking system? (assume that the banking system currently has no excess reserves) Select one: $100 million. O $90 million. $10 million. O $110 million. Clear my choice